The DOL highlighted that the self-correction features would apply primarily to the most frequently addressed issues under the VFC program, including late participant contributions and loan repayment transmittals. The updates also align with the Internal Revenue Service’s Employee Plans Compliance Resolution System for addressing participant loan failures.
Program Background and Goals
First adopted in 2002, the VFC program was designed to help retirement plan managers resolve fiduciary breaches voluntarily while avoiding enforcement actions or civil penalties. The program allows corrections for issues such as late contributions or missed payments, ensuring workers’ benefits remain secure.
The EBSA initially proposed these changes in 2022, with the goal of increasing participation and reducing administrative burdens. According to the final notice, the updates reflect the agency’s commitment to supporting employers in protecting employees’ retirement savings.
Benefits for Employers and Workers
The streamlined process is expected to reduce compliance costs while encouraging more managers to address errors proactively. By simplifying the correction of fiduciary breaches, the DOL hopes to bolster protections for retirement plan participants and improve overall program efficiency.
